For a small or medium-sized enterprise (SME), preparing a Forecast Plan, or Business Plan (BP), often turns into a demanding exercise (both in terms of time and resources), but is perceived as an end in itself and devoid of real benefits.
Yet, a well-developed BP can become the foundation of a company’s success, as it sets the stage for its development over a medium to long-term horizon, defining growth objectives and constantly monitoring performance.
So, let’s try to understand why creating a BP is important and, above all, what are the main aspects to consider during its creation.
Why create a Business Plan?
First, let’s identify the most important reasons why an SME decides to create a BP:
- Financial planning and management control
- Access to credit, especially bank financing
- Compliance with regulatory and audit obligations
- Merger, acquisition, or spin-off operations
These are important purposes for a company’s development: whether for internal management or communication with external stakeholders (investors, lenders, auditors, etc.), the BP must be built in such a way that it is absolutely credible and monitorable over time.
What are the main difficulties in creating a BP?
Creating a robust and credible forecast plan is not easy. Experience shows that there are several critical points to address, including:
- The BP format. What format should be used to create the plan? If the BP is intended for external parties, how can you ensure it is easy to understand and use?
- Formulating assumptions. When defining the assumptions behind the economic-financial projections, what time horizon should be chosen? Which balance sheet items should be used as a starting point? How can you ensure consistency in simulating income and asset items?
- Verifying the solidity of the BP. How can you demonstrate the robustness of the assumptions? Which BP items should be stress-tested to assess their evolution even in adverse scenarios? How can you create credible scenario analyses that account for different market conditions?
- Monitoring the BP over time. How do you verify the accuracy of the plan's estimates compared to the actual performance recorded by the company? How do you update the projection assumptions over time without having to rebuild the plan from scratch each time?
- The use of resources and time. How can you optimize the use of resources in creating the BP while ensuring its robustness, correctness, and replicability? How can you minimize operational risk? How can you optimize preparation times, minimizing rework and continuous adjustments? Why create a sophisticated BP when it becomes costly to maintain over time?
We fully understand the difficulties inherent in the points mentioned above and, thanks to our experience in both the financial and technological fields, we can offer the ideal solution to manage them.
Technesthai’s solution for SMEs
Dynamic Business Planner (DBP) is the financial planning solution specifically designed for SMEs. Developed with the most advanced cloud technologies, it helps create BPs by simplifying every aspect of the process, from choosing a standardized format to formulating projection assumptions, from consistency checks on the evolution of balance sheet items to real-time calculations to minimize time and operational risks.
The main features of the DBP solution can be summarized as follows:
- Ease of use, power, and speed of calculation
- Standardization of formats, replicability, and comparability of plans
- Planning to meet strategic needs
- Economic-financial analysis
- Scenario analysis and stress tests
Find out more on our website...